CRM practices adopted by Indian banks

Rationale of the Research:

According to Babakus et al., (2004), the banking industry has undergone massive transformation in the past one or two decades.  The range of banking services have extended from traditional services to services that extend beyond banking functions.  These include packages relating to loans, insurance and mortgages along with financial and corporate consultancy services, etc. The banks are making strident efforts to maximize the customer base (Aldlaigan and Buttle, 2005).  Employees are trained to understand and collect information about their customers through their dealings so that strong relations with clients can be forged for the ultimate profitability of the bank.

As per Kaynak and Harcar (2005) banks are making intense efforts to boost their sales environment so that they can attract customers and services in large droves.  For instance, a client who has employed five new sales officers may request for the issue of five new corporate banking cards.  The corporate card department of the bank can offer other services like car finance etc. while it is processing the request.  At the moment, there is possibility of banks making such offers. 

However, in the backdrop of cut-throat competition in the banking industry, it is likely that banks and other firms would be required to come up with interesting groups of ideas to enhance the scope for customer interaction (Levesque and McDougall, 1996).  This would enable the bank to create more valuable relationships with their customers, which can help the bank to increase their operations and maximize their profitability merely by offering clusters of services to a few customers and also by cross-selling that products and services.  Clearly, it stands to reason that the various departments can enjoy the economic benefits of using common assets, reduced sales cost and ultimately lowering the possibility of risky transactions (Molina et al., 2007).

Definitely, as per Roig et al. (2006), it has not been a piece of cake for banks to hugely alter the system of customer relations and the support functions.  It is a constant effort for the banks to keep improving their systems.  Evidently, developing the most perfect system of customer relationship management would require intense modifications in the existing systems of sales and marketing, management of database and support structures along with other systems and procedures of the organization. 

The obstacles faced by the banks in implementing the desired systems will be studied in the rest of this project.  The systems of collecting, managing and exploiting information have been specifically studied.